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Families Feel Sharp Edge of State Budget Cuts

Celia Kane-Fecay, a mother of two, has returned to college with help from cash assistance and any other aid she can gather.Credit
Fabrizio Costantini for The New York Times

LANSING, Mich. — Stretched beyond their limits and searching for new corners of their budgets to find spending cuts, states are now trimming benefits for residents who are in grim financial shape themselves.

Some states, including Florida and Missouri, have decided to shrink the duration of state unemployment benefits paid to laid-off workers, while others, including Arizona and California, are creating new restrictions on cash aid for low-income residents.

Here in Michigan, more than 11,000 families received letters last week notifying them that in October they will lose the cash assistance they have been provided for years. Next year, people who lose their jobs here will receive fewer weeks of state unemployment benefits, and those making little enough to qualify for the state’s earned income tax credit will see a far smaller benefit from it.

Some political leaders see these sorts of cuts as unfortunate necessities to help bridge their state’s financial gaps. Others see them as overdue limits on out-of-control government handouts — some lawmakers here fumed, for example, that 30,000 college students, newly dropped from the state’s food stamp rolls, should never have been allowed to collect such benefits in the first place.

The percentage of children living in poverty rose during the last decade, particularly once the recession hit and unemployment soared.

By 2009, about 2.4 million more children’s families lived below the poverty line than in 2000, an increase of 18 percent, according to a recent analysis of Census Bureau data by the Annie E. Casey Foundation, a child advocacy group. In states like this, where Republicans took control of the capital this year, the new cuts have helped resolve Michigan’s expected budget gap, once estimated at $1.4 billion.

“Michigan can no longer afford to provide lifetime assistance,” said Sheryl Thompson, an official with the state Department of Human Services, which reported that of those being dropped from the state’s cash-assistance rolls, some 1,200 families had been receiving payments for 10 years, more than 700 others for a dozen years, and an additional 400 families had been getting payments for 14 years.

The pattern of new cuts around the nation leads some advocates to fear that the number of low-income families will only grow in the next few years if programs they can lean on shrink or vanish.

“We’re O.K. unless something — anything at all — goes wrong,” said Rachel Haifley, who lives here in Lansing and said she works part-time making a little less than $9 an hour and receives child support for her two young sons, 1 and 3.

Ms. Haifley said she has become an expert at seeking out giveaways, thrift shops and bargains — for clothes, portable cribs, toys for the boys. “All I want is for them to feel like everyone else,” she said. “I don’t want them to grow up and ask me why they’re poor.”

In Dearborn Heights, Celia Kane-Fecay, another mother of two, said she has given up on the job hunt for now and returned to college — with help from $597 a month in cash assistance, Medicaid and any other aid she can track down with what she has come to describe unhappily as her daily list of begging phone calls. “You don’t ever want to be here,” she said.

Signs of new poverty are already evident. A project by the Annie E. Casey Foundation Kids Count Data Book found that by 2010, nearly 11 percent of the nation’s children, or 7.8 million children, had at least one parent who was unemployed, when only about half as many were in such circumstances in 2007. And since four years ago, the study found, at least 5.3 million children have been affected by home foreclosures.

Meanwhile, around the nation, lawmakers have weighed new limits to tax credits for low-income people; in Michigan, a proposal to throw out the earned income tax credit entirely was dropped, but lawmakers shrank the benefit — to an average of $138 a year for a Michigan family, advocates say, from $432 last year.

Six states have approved reductions in the length of state unemployment benefits. The notion appalls people like Jeananne Bishop, who has been desperately searching for a job since July 2010 and found herself washing her hair with laundry detergent at one point because she could not afford shampoo.

Ms. Bishop said her continuing benefits — now part of a federally financed extension — are the only thing keeping her afloat. Michigan’s shortened unemployment benefit limits will apply starting next year, but Ms. Bishop, 56, of Benton Harbor, seemed skeptical that much will have changed in the job market for them, cautioning, “No one calls back.”

And while at least three states, including Michigan, shortened the period during which poor residents can receive cash assistance, other states began enforcing stricter limits already on the books.

“We clearly recognize that states have huge deficits they’re dealing with, but all of these things add up in certain states to very little safety net protection for children,” said Patrick McCarthy, president of the Annie E. Casey Foundation.

In Michigan — where 23 percent of children were living in poverty by 2009 (compared with 14 percent in 2000) and with an unemployment rate, at 10.9 percent, worse than the nation’s — state leaders defended their changes.

Sara Wurfel, a spokeswoman for Gov. Rick Snyder, a Republican in his first term, said his efforts had focused on creating an economic climate in the state for more and better jobs, while also protecting and even enhancing core safety-net services like Medicaid, she said.

Ms. Wurfel added that the state had, for instance, hired hundreds of new child welfare workers. And as part of their decision to cut state unemployment benefits next year, Michigan lawmakers had accepted a federal extension of benefits this year for residents.

“In this state, we are losing hard-working families and taxpayers and gaining people who were moving here for our entitlement programs,” said Ken Horn, a Republican state representative who introduced a bill setting strict limits on cash assistance to those who have had it at least four years. That bill was signed into law on Tuesday, even as state officials were newly carrying out five-year lifetime federal limits on such assistance, which in Michigan averages $415 a month for an eligible family.

“The bill is designed with the simple idea that there should be a safety net but it should not be a lifestyle,” Mr. Horn added. “As we looked at it, it turned out to be part of the budget solution.”

Republicans said that even the cuts to those who have been on cash assistance the longest allow some exceptions (for those with disabilities, for instance), and that the rest will get special attention from social workers.

But Fred Durhal Jr., a Democratic state representative from one of Michigan’s poorest regions, said that will not be enough. He has begun calling Oct. 1 — the start of cuts to cash aid — doomsday.

“Sometimes you’ve got what’s fiscally sound, and you’ve got what is morally and ethically the right thing to do,” Mr. Durhal said. “Those don’t always jell well together. You can’t take grandmas away and put them on the street, and you can’t take milk from babies.”

A version of this article appears in print on September 7, 2011, on page A22 of the New York edition with the headline: Families Feel Sharp Edge of State Budget Cuts. Order Reprints|Today's Paper|Subscribe